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July 16, 2019

What you need to know about CMS' 346-page home health rule

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    CMS on Thursday issued a proposed rule to update certain Medicare payment regulations under the Home Health Prospective Payment System and increase payments for home health agencies (HHAs) by  1.3%.

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    Proposed rule details

    CMS in a fact sheet said the proposed rule includes "routine updates to the home health payment rates for calendar year (CY) 2020" and proposals intended to reduce fraud, increase home-based care, and prioritize patients' unique needs. According to Inside Health Policy, the proposed rule lays out how CMS plans to:

    • Allow therapist assistants to perform maintenance therapy;
    • Implement a new home infusion benefit;
    • Implement a case-mix payment methodology, called the Patient-Driven Groupings Model (PDGM), intended to improve the accuracy of payments for home health services; and
    • Phase out prepayments for home health services.

    Proposed payment adjustments for 2020

    Overall, CMS estimated the proposed changes would increase total HHA payments in aggregate by 1.3%, or $250 million, in CY 2020. The proposed increase is down from a 2.2% payment increase CMS implemented for HHAs in CY 2019. CMS said the CY 2020 rate update includes a 0.2 percent decrease in aggregate payments under the new rural add-on policy, mandated under the Bipartisan Budget Act of 2018.

    Proposed rule implements a new payment model

    CMS under the proposed rule would implement the new PDGM payment model for HHAs that the agency finalized last year. According to CMS, Medicare currently pays home health agencies for 60-day episodes of care, and payments are based on the number of services provided to beneficiaries.

    Under the new PDGM model, CMS would base home health reimbursements on 30-day episodes of care and on patient characteristics. CMS under the new model no longer would determine home health reimbursements based on the number of services provided to beneficiaries.

    CMS in the proposed rule also included a behavioral-based payment reduction of 8% to offset anticipated increases in overall spending that result from changes in coding and diagnosis practices after the model is implemented.

    Phase out prepayments for HHAs

    CMS under the proposed rule also would phase out Requests for Anticipated Payment (RAPs), which allow HHAs to request and receive large upfront payments at the beginning of episodes of care based on the total estimated cost of services. CMS in a release said both the agency and law enforcement have seen an increase in the number of health care fraud schemes involving HHAs that submit RAPs and receive large upfront Medicare payments, but never submit final claims data, and soon after close for business.

    CMS under the proposed rule would reduce the "RAP split-percentage payment to 20% for existing HHAs beginning in CY 2020 with elimination of split-percentage payments for all HHAs in CY 2021." HHAs beginning in CY 2021 would begin to file a one-time notice of admission to alert the claims processing system when a beneficiary is under a home health episode of care. CMS in the fact sheet said, "This is intended to prevent duplicate billing for supplies and therapy services that are bundled into the home health payment amount."

    Home infusion therapy benefit

    CMS under the proposed rule also would implement a permanent home infusion therapy benefit beginning in CY 2021. CMS would group infusion drugs into three payment categories, and each category would have an associated single unit of payment in accordance with their infusion codes and units under the Physician Fee Schedule (PFS). CMS would adjust each unit of payment by the agency's Geographic Adjustment Factor, which is a weighted composite of the three geographic practice cost indices used for the PFS. CMS under the proposed rule would set higher payment amounts for a beneficiary's first home infusion therapy visit, and lower payment amounts for each subsequent visit. CMS under the proposed rule would pay for home infusion only if a skilled professional is present at a patient's home during the therapy.

    Expand roles for therapist assistants

    In addition, CMS under the proposed rule would amend current regulations to permit therapist assistants to perform maintenance therapy under the Medicare home health benefit. CMS in the fact sheet said the proposal "would allow therapist assistants to practice at the top of their state licensure … and would provide HHAs the flexibility to use either therapists or therapist assistants to meet the maintenance therapy needs of their patients."

    CMS added that it also is "proposing changes to the current payment regulations regarding the home health plan of care in order to align the regulations with current policy."

    Quality measures

    CMS also proposed to adopt two new quality measures under the Home Health Quality Reporting Program (HHQRP) to address the transfer of health information. The two measures—Transfer of Health Information to Provider-Post-Acute Care and Transfer of Health Information to Patient-Post-Acute Care—are intended to ensure patient medication lists are accurate and complete at the time of a transfer or discharges, CMS said.

    In addition, CMS proposed:

    • Adopting standardized patient assessment data elements that aim to "assess cognitive function and mental status, special services, treatments and interventions, medical conditions and comorbidities, impairments, and social determinants of health;"
    • Eliminating the Improvement in Pain Interfering with Activity Measure from HHQRP;
    • Removing Question 10 on pain communication from the Home Health Care Consumer Assessment of Healthcare Providers and Systems Survey "to avoid potential unintended consequences that may arise from its inclusion in CMS surveys and datasets;" and
    • Updating the specifications for the Discharge to Community HHQRP measure to exclude baseline nursing home residents.

    Home Health Value-Based Purchasing Model

    CMS also proposed changes related to the Home Health Value-Based Purchasing Model. Under the proposed rule, CMS in CY 2020 would begin publicly reporting "the Total Performance Scores (TPS) and TPS Percentile Ranking from the Performance Year 5 (CY 2020) Annual TPS and Payment Adjustment Report (Annual Report) for each [HHA] in the nine model states that qualified for a payment adjustment for CY 2020." CMS said it expects to publish the data after Dec. 1, 2021.

    CMS is accepting public comments on the proposed rule until Sept. 9.


    Several observers raised concerns over CMS' proposed 8% rate cut under the new proposed payment model.

    William Dombi, president of the National Association for Home Care and Hospice, said the agency's preemptive decision to cut payments based on a projected increase in spending would lead HHAs to engage in behaviors that would increase costs in order to not lose money. "NAHC supports sensible payment reform. While the payment model reforms include sensible changes, the behavioral adjustment is neither sensible [n]or warranted," Dombi said, adding, "Thankfully, there is bipartisan, bicameral legislation pending that can fix this serious flaw in the new payment model."

    Blair Childs, Premier's SVP of public affairs, said CMS' proposal to allow payments for home infusion only when a skilled professional is at a patient's home is a restriction that does not align with congressional intent. Premier said removing the restriction would lower health care spending and ensure patients have better access to home infusion services (Diamond, "Pulse," Politico, 7/12; CMS fact sheet, 7/11; HomeCare Magazine, 7/11; CMS release, 7/11; Romoser, Inside Health Policy, 7/11 [subscription required]; Stein, Inside Health Policy, 7/11 [subscription required]; CMS proposed rule, 7/11).

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